Answer:
Cost of Goods Sold = $234,000
Option B is correct ($234,000)
Explanation:
First we will calculate total direct material used in production:
Total Direct material=Starting Direct Material+ Purchases of Direct Material+ Ending Direct material
Total Direct material=$40,000+$75,000-$43,000
Total Direct material=$72,000
Calculating Cost of goods Manufactured:
Cost of goods Manufactured=Total Direct material+Direct labor+ Manufacturing Overhead+Beginning WIP inventory-Ending WIP inventory
Cost of goods Manufactured=$72,000+$48,500+$72,500+$87,000-$69,000
Cost of goods Manufactured=$211,000
Cost of Goods Sold = Cost of goods Manufactured+ Starting Finished Goods-Ending Finished Goods
Cost of Goods Sold = $211,000+$128,000-$105,000
Cost of Goods Sold = $234,000
Option B is correct ($234,000)
